Apple drops iPhone price by a third…Early buyers not amused

In addition to today’s iPod updates and the intriguing new iTunes Wi-Fi Store, Apple also made a controversial announcement concerning the iPhone. After nearly six months of hype and marketing to Apple enthusiasts, average Joes, and even your grandmother, Apple enjoyed a strong iPhone release at the end of June—only to retire the 4GB model two months later and knocked a third off the price on the 8GB. That’s right: instead of $599, customers can now pick up an 8GB iPhone for a mere $399. I sure hope Apple prepared their customer service reps with some great answers as to why the company just more or less flipped the bird to their early adopters, especially since the meaning of “early adopters” isn’t exactly what it used to be.

In case it isn’t obvious, I’m a bit stung by this move because I was right there in the lines on June 29th for an 8GB iPhone, right alongside Apple enthusiasts and regular John Does alike (hey, at least I had an excuse for being an iNerd that day: I write about this stuff for a living). Of course, in a big way I’m happy about the price drop because I really dig my iPhone, I want to see it gain traction in the industry—the new price significantly lowers the bar for more folks to pick one up.

But this isn’t about the enthusiasts who stood in line on June 29th—it’s about having a good business decision look bad because it came just a little too soon. A price reduction on a high end product that was so hyped to the general public (not just hard core fans) a mere two months after release reeks of the stereotypical Apple arrogance that so many have tried to diffuse and defend over the years. I understand that things change, costs lower and product interest fluctuates, but dropping the price by that much so close to the initial launch is going to hit a lot of customers the wrong way. The kind of customers who were willing to spend $600 on a phone, and who are also likely to warn their friends and family about Apple’s practices after getting stung like this.

Do I think Apple needs to do something for their early buyers? You bet. Do I think they will? Probably not, at least not unless those buyers work their way up the phone support tiers or make a scene in a physical store, but it shouldn’t come to that. Then again, Apple shouldn’t make promises, deliver a product and then pull the carpet out from underneath both their loyal customers and—in this new world where Apple is a household brand—the general public either.

Update

A reader just e-mailed us to remind us of Apple’s return policy. If you purchased an iPhone from Apple in the last 14 days, you get a refund of the price difference:

Should Apple reduce its price on any Apple-branded product within fourteen (14) calendar days of the date of purchase, you may request a refund of the difference between the price paid and the current selling price. An original purchase receipt is required, and you must request your refund within fourteen (14) calendar days of the price reduction.

That’s small consolation for those who bought an iPhone prior to August 22, but those who have succumbed to the lure of the iPhone in the last 2 weeks can get $200 back.

Update 2

To clarify: this was more about the price drop happening a bit sooner than expected, and not at all surprise that a price drop happened in the first place. Tech products drop in price all the time, but two months simply felt a little early.